Posted in Financial freedom, Kids

How to Teach Financial Education to Young Children

Posted on by Tim Connolly
Teaching Kids How to Count Money in Fun and Easy Ways | LoveToKnow
How to Teach Financial Education to Young Children

While I was looking for tools to teach kids financial education, I can across several articles showing that kids as young as five years old start developing financial habits. Then I found out that most states don’t have any sort of required financial education in their school curriculum. Most that do teach financial literacy or economics only teach at the high school level. Which is crazy when you think about it because you can open a bank account in your mid-teens, from 14 to 17 years old

So as a teenager they’ve already developed financial habits, they already have a bank account, in some states they can have internships or jobs, and in a few short years they’ll be 18 and legally an adult with adult financial responsibilities yet we’re JUST beginning to teach them about money and finances?

I thought, ‘This is crazy! Why isn’t anybody doing anything about this?” So I decided that I would do something about it.”

At what stage do you think children should be taught financial education?

“As soon as possible. We should start teaching kids about money, the day they start asking you to buy things for them or start talking about money. As I mentioned, research actually shows kids develop habits as young as five years old. So, in my opinion, if they can understand it and are developing those habits shouldn’t we be teaching them?

I should also note that what we teach them should be appropriate to their age. You’re not going to try to explain compounded interest to a five year old. Heck there are adults that don’t understand compound interest! But we can start teaching them some basics and as they get older teach them the more complex concepts as well. ”

And who is best suited for that? Teachers? Parents? 

“Well, ideally, it should be both. Finance is a complicated subject and the more financial education the better. At Money Munchkids we highly encourage parents to not let the education end with our products or camps. Plus, every parent has their own thoughts on how to manage money and their own unique lessons to pass on to their children. In reality, teaching your child financial education can become a bonding time. We also believe that critical life skills like financial education are always going to necessary and should be taught at grade levels.

What is your vision at Money Munchkids?

“Our official vision at Money Munchkids is to empower the next generation with the financial knowledge they’re going to need as adults. We want to help create a stable foundation of knowledge in financial education for young children in a fun and friendly way. Of course what Money Munchkids is goes beyond our products. It’s in our company culture.

I want Money Munchkids to be a next generation company. A new kind of people focused company. A few of our company culture pillars are family first, eco-friendly, inclusive & team oriented and tech savvy. One example is that almost all of our staff telecommutes and make their own schedule, and, it will most likely always be this way. Telecommuting allows for flexibility for families, is more eco-friendly, allows people autonomy they wouldn’t get at most other companies and allows for people who need special accommodations to work in an environment that suits them best.

Personally, I suffer from chronic migraines. I remember having to take my breaks in a dark storage room because I was having a migraine and the lights hurt. I never want anyone who works for Money Munchkids to feel like trapped that.

We’re also big on being eco-friendly. We print our products on demand which helps reduce waste. When you order directly from our website we use minimal packaging with packing slips printed on recycled paper. In fact we ONLY use recycled paper. I want everything about Money Munchkids to be able creating a better type of company, with a people first principle, that has every aspect toward creating a better world for the next generation.”

What educational resources can you provide schools?

“Last year we actually launched a financial education curriculum for schools. We enlisted the help of several teachers both national and international with various specialties. Our curriculum, like all of our products is for elementary grades K through 3rd.

What’s so cool about it is that we made sure to include activities in each lesson that catered to at least two out of the seven learning styles. So regardless of what type of class a teacher has we have activities for everyone. We also include a list of videos and books that teachers can use in the lessons, which are already out there and freely available. So regardless of classroom style, school budget or resources can use other materials to engage their class better.

We also have the books for each grade mirror each other so classrooms that are mixed grades can also utilize our financial education curriculum. Mixed grade classrooms are becoming more popular and curriculums that work with both single and multi-grade classrooms aren’t common. So our curriculum really allows for a customizable classroom experience.”

How about parents who homeschool their children?

“Well, we’re not quite there yet for a financial education curriculum for homeschooling. We will be releasing a homeschool curriculum later this year, around May actually. But until then we do have our financial education activity books and home activity pack. We also have tons of free resources on our website. One of which is a free bank game for kids which parents can get just by signing up for our email list.”

Where do you see your company heading in the next 5 years?

“In the next five years, wow. We’ll we already sell our products across the US. I’m definitely hoping that we’ll have financial education camps in other states as well. I’d love to see public school districts really get serious about financial education for their students. I know that lots of private schools are already responding to parents pushing for financial education. Of course, we’ll continue to create more tools for parents to use at home as well. Overall, I mean, I just really want Money Munchkids to be a company who parents and school can come to for help teaching critical life skills, like financial education, to their kids and students.

Posted in Financial freedom, Kids

Need to Teach Your Kids About Personal Finance? Here Are Some Fun and Engaging Ways to Start

Posted on by Tim Connolly
Teaching Kids About Money: Why Is it Important? | Inside Your IRA
Need to Teach Your Kids About Personal Finance? Here Are Some Fun and Engaging Ways to Start

One of the most important skills that parents can pass on to their children is the correct and responsible way to handle money.

Considering how important financial literacy is for navigating life, it’s surprising that it isn’t generally taught in schools. This also makes it all the more important that, as a parent, you impart these crucial life skills. The family environment is also a great one to teach kids about issues—such as debt and credit cards—that can be sensitive. Above all, talking about money with your kids from an early age encourages an openness that is one of the most important positive impacts of nuclear families.

It’s never too early to start, either. Kids as young as 4 years old can start to understand financial concepts. The key is making those lessons age-appropriate. Economic education groups are supporting families to teach financial lessons to their children with free advice and resources. This article will look at ways families can teach their children about finances and how to safely manage money.

Financial literacy is one of the most important skills for building a successful life, but unfortunately, many adults do not possess it. Beth Kobliner, author of the bestselling book “Get a Financial Life” and a member of the President’s Advisory Council on Financial Capability, points out that the mortgage crisis of recent years shows just how little financial knowledge most Americans have.

This is reflected in the shocking state of personal finance among individual adults in the United States today. Almost half of all Americans are living paycheck-to-paycheck. Only 46 percent of Americans have set aside any money at all for a rainy day fund. The average credit card balance an American carries is more than $6,000.

Do you really want your children to make these same mistakes and have financial burdens for the rest of their lives? If you’re like most parents, you may respond with a firm no, but you may also argue that schools should teach financial literacy to students instead. Unfortunately, schools and the educational system as a whole aren’t going to do your children any favors either.

As we’ve previously pointed out, the main problem with American education isn’t funding, but rather the topics that schools focus on. Financial education is a huge lacuna in our public school system. This means that if you want your kids to grow up to be successful, you’ll most likely have to teach them yourself or champion financial education at your child’s school.

You can start teaching your kids about handling their finances responsibly from a very early age. The key is to make these lessons appropriate to their level of intellectual development. While a 3-year-old might not understand the complexities of financial derivatives, they can certainly understand that if you give them $1 they have a choice about which piece of fruit to buy.

The research also indicates that there is a real benefit to starting young when it comes to building good money habits. A child’s money habits can be formed as early as age 7.

The most important principle in providing financial education to kids is to take it slow, and make your lessons relevant to their everyday lives. This means that your lessons will vary according to how old your kids are.

Below, we’ll take a look at the key lessons you should teach to kids of various ages, and how to do that.

The best lesson to begin with, and one that even many adults still haven’t learned, is this: You have to save and wait to buy something you want.

This is a key lesson for kids to learn at a very young age, and you can begin this process when they are still 3 years old. Young children can have a problematic association between going into a store and you buying presents for them.

It’s therefore important to point out to them that toys cost money, and that money isn’t unlimited. When you go shopping, you can explain to them that you are in the store for a particular item, and therefore you will not buy them presents.

In addition to this basic lesson, there are some great activities that you can do, even with very young children:

  1. Create three jars, labeled “saving,” “spending,” and “sharing.” Whenever your kid receives money—even a couple of dollars—they can then decide which jar to put it in. The “spending” jar can be for buying sweets and other small items, and the “sharing” jar is for donations to charities or presents for friends. The “savings” jar is for more important items.
  2. You can also have your kid set a savings goal, such as to buy a particular toy, just make sure that they are being reasonable with how much they want to save up. They should be able to afford their present in a few weeks, not a year.

As your kids start to grow up, you can build on these lessons. Between the ages of 6 and 10, you can continue with the “jar system” we’ve explained above, and perhaps start to give them a little more in their allowance. Just make sure that you supervise their savings goals, so that they don’t get overambitious and start to have negative associations with savings.

At this age, it’s also important to start to include your kids in your financial decisions, so that they get a taste of what making decisions with money is all about. For instance:

  1. You can include your kids in small financial decisions, such as buying products online. The average person already spends five hours a week shopping online, so there should be ample regular opportunities in your life for including your children in the buying and shopping process. You can explain that certain products offer better value for money, or the importance of taking advantage of sales.
  2. You can also start to give your child a little more autonomy at this age. For example, when you need to go shopping for new shoes, you can give your child money and allow him or her to select the shoes he or she wants within that price range.

Around this age, you can start to shift from short-term savings goals to longer-term goals. By the time they reach 11 years old, most kids will have an appreciation of how long a month is, and can start to conceptualize how long they will have to save up to afford something.

Children around this age can therefore begin to get a basic understanding of how money and finances in the real world work. For example, children around this age can begin to understand concepts such as compound interest, how credit cards work, loans, debt, and income.

A critically important subject that you will want to introduce to a child in this age range is how to keep track of cash flow, in addition to teaching terms such as line of credit, operating cash flow, and working capital.

Another very useful lesson at this age is to teach your kid about compound interest. This might sound complicated for an 11-year-old, but most kids will actually grasp the concept pretty easily. You can also help them by:

  1. Describing the idea of compound interest with real numbers, and not in the abstract. Research shows that this makes the idea much easier to understand.
  2. You can also show your child how to do some compound interest calculations on Investor.gov. Here, they can see how much money they will earn if they invest a certain amount and it grows by a certain interest rate.

As your kids approach adulthood, the lessons you pass on can grow more complex. One of the most important discussions to start having with them at this age is about the cost of a college education.

Most colleges offer a “net price calculator” that will allow you to calculate the total cost of going to particular colleges, and you should start to have this discussion by the time your children are in ninth grade. You can compare how much each college costs, what the employment prospects of graduates are, and how much student loan debt could affect your child’s lifestyle after graduation if they attend that college.

Another key lesson for teens, especially as they approach their 18th year when they will become an adult, is to start seriously talking about investments, and their long-term financial goals. If you’ve managed to cultivate a habit of saving in them, now is the time to explain how to safely start to invest in the stock market. Stock trading mobile apps such as Robinhood have been great for making investing more accessible to younger people through zero account minimums and commission-free trading.

At this age, you can also start to have discussions with them about the way in which finances impact our society and politics. It’s important to teach your children not just about personal finance, but about how money in our economy works as well.

It’s never too early to start your kids on the road to success, and that includes teaching them about money and finances. The family environment is a great one for imparting lessons that your kid’s school overlooks, but also has other advantages.

Talking about money with your kids from a young age will not only give them the habits and knowledge they need to manage this successfully in the future; it will also cultivate an openness that will mean that money is far less likely to be a source of family tension.

Posted in money management

Tips for Teaching Kids about Financial Independence

Posted on by Tim Connolly
Teaching kids ABCs of personal finance, investing
Tips for Teaching Kids about Financial Independence

As millions of students across the country prepare for year-end exams and/or graduation ceremonies, the National Foundation for Credit Counseling (NFCC) encourages parents to continue the learning process by teaching children about the importance of saving and smart money management.

While some schools are offering money management or financial education courses, a significant number of high school students still lack a basic understanding of general financial concepts related to stocks, bonds, savings accounts and checking accounts, according to the most recent survey from the National Jump$tart Coalition for Personal Financial Literacy. The average score on the 2006 survey, given to high school seniors to measure their knowledge of basic financial concepts, was only 52.4 percent.

The NFCC suggests parents take the following steps to arm their children with smart financial skills that can place them on the path to financial literacy rather than debt overload.

“Children are never too young to start learning the smart financial skills that they will need and use throughout their lives,” said Susan C. Keating, President and CEO of the NFCC. “Every day life is full of opportunities to teach children how money works and the value of saving money – from watching parents place loose change into jars, to collecting allowance money, to observing parents’ spending habits.”

Examine your own attitudes about money.

Like it or not, most children will not necessarily practice what you preach, but instead follow by example. Imagine a child who sees a parent always purchase the latest technology gadget versus a parent who saves for several weeks to purchase a new TV or computer.

Communicate openly with children about personal finances. 

Words like reconcile, savings, interest, credit debt are commonplace for adults but not for children. Take the time to sit down with young children and teach them what each of these terms mean. For older children, start to talk about the importance of IRA and 401(k) retirement accounts, and the difference between risk and return on stocks and bonds.

Arm children with basic financial tools. 

Open a savings account for your child – whether s/he is a newborn or about to enter high school. Show your children how to add gift money or part-time income to a savings account. Or consider purchasing a savings bond or some stock for your child to let her/him see first hand how the money can grow, and at what speed.

Teach children about budgeting. 

Consider giving your child an allowance and talk to her/him about plans to save or spend the money. Explain how if s/he uses the $5 on candy, it will take him longer to save money for the latest video game s/he wants.

Where possible, turn every day errands into personal finance lessons. 

Let your children see you compare the prices, use coupons, or broker a discount on a large purchase. Take the time to explain how and why you make your purchasing decisions. Show children smart purchasing tips such as sticking to a list of needed items, or purchasing birthday gifts in bulk.

Teach children about the correct ways to use debt. 

With credit card companies aggressively targeting college students and more parents giving their teenage children credit cards, now is the time to teach children how to use credit wisely. Explain to children the circumstances under which debt can be used wisely and the importance of paying off the credit card every month – or paying at least double the minimum payment.

Teach children about loans. 

Most children don’t necessarily realize that their parents don’t “own” their house, or realize the products for which people take loans. Take the time to teach children about the importance of having a monthly loan within your monthly income, and the importance of paying all bills on time to ensure a good credit rating, which can translate into a lower loan rate.

Taking steps now to educate children about the smart path to financial literacy will benefit children for years to come – and may serve as an opportunity for parents to get their finances back into shape, too. From budgeting and debt repayment to investing in stocks and planning a comfortable retirement, there are tools to teach money management to children at every stage of their financial journey.

Posted in Kids, money management

5 Ways to Teach Your Kids About Finances

Posted on by Tim Connolly
When to Start Teaching Your Kids About Finances | 1ˢᵗ Franklin Financial
5 Ways to Teach Your Kids About Finances

There are plenty of philosophies on how best to educate and responsibly teach money management to children. Some earn money through chores. Some have a weekly or monthly allowance. Others have checking accounts set up at early ages and are taught to keep a register so they are always aware of their balance. Some pay a small fine for trespasses, from slipping with a swear to putting bugs in their older sister’s bed. So on and so forth. All of these are good and noble ways to teach kids about the connection between work and money, as well as the consequence or cost of actions.

Even as real estate investors, teaching our children how to handle money responsibly isn’t easy. Money and finances can be complicated — but that doesn’t mean we can’t use our wisdom from investing in real estate to impart good principles for the future of their money management.

I am sure that there are many readers on here who do the same things that I do, particularly when it comes to real estate investing and involving your kids. My kids go with me to the houses I am renovating. They go with me to check on the houses, review the job site, meet with the contractors and even visit the bank. They are in the middle of watching and learning what I do, but the money side of it is tricky.

I don’t want them to think money is just growing on trees, but there are a lot of things that they need to learn and there are steps to take on that road. I wouldn’t say that it is step by step, but there are definitely easy concepts to more advanced concepts, and these are 4 essentials I think my kids have to understand. While these tips primarily target younger children, remember that you can always impart your financial wisdom, whether you’re talking to 12-year-olds and teenagers or your grown children.

5 Ways to Teach Your Kids About Finances

Start With Savings

After settling on an appropriate and reasonable allowance for your children, use it as a tool to teach them how to save. You can start by simply refusing to fulfill an immediate impulse when your child doesn’t have the funds to make a desired purchase. Make them wait until their next allowance. By the same token, teach them about setting money aside. They can start to learn when something is worth dipping into their savings for — and when it isn’t.

We use glass jars that are visible on the counter, and it helps them to have an understanding about how much they “have.” That is a good thing for children and easy to understand and start developing a healthy understanding of “how much” is a lot.

Make Buckets

U.S. News Money recommends a bucket method for kids. Require your children to split their allowance into four “buckets”: charity, savings, investing and spending money. Require that that allowance be divided in some way in all four buckets. Talk through their financial decisions with them and stress the value of empathy and giving as much as the value in delayed gratification and the principles of compounding.

Delay Gratification

This is a great place to throw this one in because it is so important in today’s society. Everything is instant gratification. and so much of the recent research into millennials shows that the most recent high school and college graduates have a tough time respecting time. They are used to having everything now. They want to be the boss now. They want the house, the cars, the bling and the latest and greatest of everything and they want all of it now.

The best thing we can do is teach our kids to wait. Be happy and satisfied with the time it takes and the work it takes to get your goals. The reward of that goal is worth the wait. So, speak with your children about the need to wait and delay their gratification.

Learn Balancing and Budgets

From the buckets, children must learn the relationship between earning, spending and saving. Can they afford to dip into their savings for something? Is it worth the trade-off? In time, they can learn how to balance a checkbook and develop a personal budget. Teach them, then let them try out financial concepts in real life. In time, they will develop an appreciation for the value of money and how to wield their capital responsibly.

As for real estate, share with them your budgets on your properties. Show them the rental deposits and the mortgage payment. Help them to understand the difference between the two and the fact that one gets paid whether or not the other is collected!

Invest!

It doesn’t have to be a big investment. Some children may not be ready for it, and looking at stocks and everything involved may be overwhelming to them. Introducing them to mutual funds and teaching them how to follow stocks, however, can be a valuable step to raising financially-savvy kids. For me though, I would rather let my kids get involved in a real estate deal. Let them purchase the light kits for an investment property, and pay them interest on their money. Let them cover the cost of a particular line item in your budget, and then pay them accordingly.

Speaking of investing, teach them the value of investing their time and not just their money. You may just be bringing up the next great generation of real estate investors. They are going to need to know how to manage not only their dollars, but their time as well.

Let them try. Involve them. Even if the concepts are simplified for their sake, you can explain to them how investing works and how it can grow their money for the future. There’s plenty kids can learn from you about money. Don’t let them get to their senior year of high school before they take a personal finance class. Use what you know from investing in real estate to build a solid education for their future.

Posted in Financial freedom, Kids

New e-book teaches kids how to spend and save money

Posted on by Tim Connolly
12 Tips For Teaching Kids To Save Money - Self.
New e-book teaches kids how to spend and save money

Arming children with a solid financial education can set them up for a more financially secure adulthood. However, a new study finds that few parents actually make time to talk to their children about money matters.

Findings from a new survey commissioned by digital financial services provider Ally showed that although 83% of parents believe saving money is one of the most important money skills children should learn, only 13% of parents regularly talk to their kids about financial matters.

In an effort to help parents educate their elementary school-aged children about money, Ally Financial has launched a free digital children’s book with a storyline that reinforces basic financial concepts.

Building financial literacy

“Planet Zeee and the Money Tree” is a tale about three children from another planet who come down to Earth and can’t quite seem to grasp the concept of money. Fortunately, the aliens meet children from Earth who teach them how money is earned, used, and why it’s important to save and give back.

The e-book and its accompanying resources for parents are an extension of Ally Financial’s Wallet Wise program, which offers tools to help consumers better manage their money. In creating the new materials for families with kids, Ally hopes to teach kids money skills and concepts that will come in handy in adulthood.

“Ally believes that learning about money and building good habits from an early age can help young people make smarter money choices and feel more empowered over their personal finances and their lives in the future,” said Jacqueline Howard, director of corporate citizenship at Alley.

Teaching money skills to kids

Ally’s research revealed that 33% of parents actually felt uncomfortable talking to their kids about money. But financial literacy isn’t a topic parents should shy away from; fostering good money habits in childhood will help kids better manage their finances when they’re older. 

Here are a few concepts parents should strive to help kids understand, according to the financial experts American Consumer Credit Counseling (ACCC).

  • Where money comes from. When kids see their parents pay with plastic, they may not realize that money is being withdrawn from a finite source. Parents can teach kids about the concept of working for money by helping them set up a bank account for saving and allowing them to earn money by doing chores.
  • How to spend wisely. To help kids learn to make smart money choices, parents can have their child make a list of items they need and rank them in order of importance.
  • Importance of saving. After kids have learned the importance of spending wisely, they can be taught the importance of saving money. Parents can demonstrate this concept by having their child set goals with savings, such as saving for a new toy or game.
  • The concept of credit. Parents should also provide financial education to kids and make them understand that credit cards aren’t a source of free money. The ACCC recommends helping children under 18 learn the basics of credit by having them practice using credit by borrowing money. If they miss a payment, don’t hesitate to charge a small late fee.
Posted in Financial freedom, Kids

Four Fridays of Fun-damental Financial Literacy

Posted on by Tim Connolly
Four Fridays of Fun-damental Financial Literacy

Let’s illustrate to young people everywhere, that thinking before buying doesn’t mean you never get to purchase a want versus a need – it just helps you plan purchases and avoid buyer’s remorse. (Hasn’t this year demonstrated how incredibly important even seemingly minor financial plans, e.g. grocery lists, can be?) This is how we might structure four fun Friday afternoons, in a classroom, online, or around the kitchen table, to do just that:

Week One: Recalling Buyer’s Remorse

1) Parents and their children, or teachers and their students, can begin the discussion about the importance of thinking before buying by sharing some of their more memorable buyer’s remorse war-stories which will help in teaching money management to children.

2) Discuss that our loved ones obviously do not set out to waste their time or money on purchases that end up being under-appreciated. Doesn’t paving the road to hell with good intentions happen more during the holidays every year, than at any other time?

3) Introduce DIMS (Does It Make Sense?) Scores as a way to avoid future buyer’s remorse.

4) Practice calculating a DIMS Score by pressing the Get Started button at giftingsense.org. Uploading an image of a potential purchase really adds to the finished product (a shareable pdf summary of all the math and thinking a child has completed) but can be mildly problematic for younger children, or with older computers, so getting your first try out of the way sets the path for Week Two.

5) Distribute the Gifting Sense Glossary. You know what Sales Tax and Warranties are – but do your kids? Download our glossary to ensure that everyone understands the basic components of wise spending.

Posted in Kids, money management

Top tips on teaching financial education to children

Posted on by Tim Connolly
Top 10 Tips on Teaching Kids About Money
Top tips on teaching financial education to children

Financial education is one of the most important lessons to teach children and the current climate provides an excellent opportunity to start the conversation. I am a firm believer that all young people should have access to financial education, taught by both parents and teachers, and believe that it is an excellent opportunity to set the foundations for actions that will last long into the future.

Therefore, I have put together a list of top tips and advice to teach kids about money and make them aware of the advantages of budgeting, saving, investing and giving back. This is a life skill that, I believe, needs to be taught early on in order for them to know what to do, how money works and ultimately how to plan their financial future.

1. Start investing early

Taking small steps by investing little and often from an early age can make a dramatic difference to a young person’s future, giving them a head start towards financial security. For example, investing £5 a day, into a pension, up to the age of 10 can lead to a £1m+ investment by the age of 65*, taking compound growth into account. Or, a smaller amount of 50p a day could return £100,000 over the same period. The important thing is to start investing as soon as you can so that your money has plenty of time to grow.

* Assumes an annual growth rate of 7% net of charges. This figure is an example only and is not guaranteed. What you get back depends on how your investment grows and the tax treatment of the investment. You could get back more or less than this.

2. Make learning fun

It’s a stressful time for parents, many of whom are juggling home-schooling – often for the first time – with work and managing the household. However, there are a number of fun, quick and simple ways to start teaching children about money.

Virtual games-based lessons are often free and can include everything from budgeting and saving, to risk and reward, the basics of investing and how interest works. These programmes can help young people be better equipped to make smart financial decisions when they are older.

3. Lead by example

Ensuring people have the ability to plan, grow and protect their financial future and achieve financial wellbeing in a world worth living in is so important. It is equally as important to be able to share and teach these skills to our children, so they can grow up with a sense of confidence towards money and know how to make informed decisions throughout their lifetime.

Educating young people about the advantages of budgeting, saving, investing and giving back is a life skill that needs to be taught early on. In doing so, we can all take a moment to consider whether we are leading by example with our own finances and, if not, see where the opportunities are to make adjustments.

4. Increased emotional and financial support

It’s likely that your children will need extra support during these unprecedented times, whether they are young and home from school, or older and back from university. Thinking about money as a family is a great place to start and has the added benefit of introducing younger generations to financial planning. The impact of coronavirus can prompt us to teach young people important life skills such as how to adapt to current circumstances and avoid financial strain, while still saving for the future.

5. Set a goal

Whether it’s buying a first home, paying for further education or travelling the world, setting a goal and putting money away to save for this early on in life can make it achievable. The longer the investment has, the greater the benefit will be from potential year-on-year compound growth of reinvested returns. For example, investing £200 a month into an ISA for five years can grow to over £13,000*.

* Assumes an annual growth rate of 5% net of charges. This figure is an example only and is not guaranteed. What you get back depends on how your investment grows and the tax treatment of the investment. You could get back more or less than this.

It is hugely empowering to take control of the elements of your life that you are able to, particularly at the moment, and teaching tomorrow’s generation the correct behaviours now when it comes to money can help to set them up for the years ahead and a life of financial wellbeing.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and the value may fall as well as rise. You may get back less than the amount invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.

Posted in Financial freedom, Kids

EASY FINANCIAL EDUCATION EXERCISES FOR YOUR KIDS

Posted on by Tim Connolly
financial lessons for kids
EASY FINANCIAL EDUCATION EXERCISES FOR YOUR KIDS

Providing financial education to kids is one of the best ways to set them up for success later in life. It is never too early, or too late, to teach them the value of money and how to save for a rainy day. Below are some suggestions to help get you started.

Teach Them to Budget

An allowance can be a great first step in showing your kids how to manage money. Practice makes perfect, after all. If they blow their allowance on a new toy and don’t have enough left to get ice cream, that can actually a good thing. This can be a firsthand lesson on the consequence of overspending before it becomes a real issue later in life.

Show Them the Value of Saving

Your child wants a new toy that they don’t have enough money for? Help them to save up! Decorate a jar with cut-out photos of what they are saving for to help remind them that good things come to those who wait. Once they have saved enough, take them shopping and let them pay the cashier. They will never forget how good it feels to work toward a goal and be rewarded in the end.

You can also begin to show them what’s it like to manage an account and open a simple savings account. Take them with you to make deposits so your child can learn how to be hands-on with their money.

Let Them Earn a Little Extra

You expect your kids to clean their room, help with the dishes and do other daily chores. But, consider offering them the chance to make extra money by taking on another task that goes beyond their routine. Getting paid for extra work will help instill good habits and give them more control over saving and spending. If they are older, encourage entrepreneurship. Would they enjoy running a lemonade stand? Are they old enough for babysitting or a part-time job?

Introduce Philanthropy

Have your kids donate a portion of their allowance to charity. It teaches them that money can be used to help people, rather than just for buying things. Remind them that it’s not how much you give, every little bit counts. Let them pick out the charity that means the most to them. If they have a hand in the decision it will go a long way to leaving a lasting impression.

Posted in Kids, money management

10 ways to make money as a kid

Posted on by Tim Connolly
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10 ways to make money as a kid

At some point in life, your kids will need to start earning a living. They can get an edge by learning how to earn money from early on. The experience will help them become more responsible and learn valuable money skills such as saving, budgeting etc. that will serve them well in the future. Teaching kids about money is one of the best ways to hone their budgeting skills and feel empowered. Your kids will learn valuable lessons that will last them a lifetime. Just ensure they are old enough to work and it won’t interfere with their school work. The following are some creative ideas for kids to make money.

Run errands for neighbors/assist the elderly. 

People around you or senior citizens usually have odd jobs or errands they need others to do. Kids can run the errands and get paid for their help.

Recycling. Kids can recycle cans and take them to the nearest recycling plant.

 You will be saving the environment and at the same time earning money. Just do a quick search online to find the nearest recycling plant and find out how much they pay per pound of bottles or cans.

Start a lawn service business. 

You can mow your neighbor’s yards in the summer, shovel snow in the winter and then rake leaves in the fall. The size of the yard will determine your fees. Your parents can help you design flyers to advertise your business.

Babysitting. 

You must be old enough to do this and get the required red cross training and certification. You can also house sit for neighbors when they are out of town. Clean up the house, check mails and care for their garden.

Give Music Lessons. 

Maybe your teen is a whiz at the guitar or piano.  He or she can easily offer piano lessons to neighbors. They are using their talents to teach other kids and earning money at the same time.

Provide pet care services.

 Look around for opportunities to care for your neighbor’s pets. Pets need walking, washing and on occasion, training. Many pet owners would love to have a responsible teen watch their pets while they are away.

Sell Crafts online or at Craft Fairs.

 Have your kids learn knitting, jewelry making or any other craft and have them open a Craig’s-list or Etsy store to earn some extra bucks to support their craft! They can also sell their toys and other collectibles online.

Grow and Sell Vegetables. 

Kids can create a vegetable garden with a little help from their parents. Not only is a vegetable garden a healthy gift to your family, it is also a great educational experience. You can set up a stand in your yard to sell your product. Unsure of what to charge? Check the prices at your local grocery store.

Paper Route/round. 

This is an excellent opportunity for kids to learn responsibility and earn extra bucks in a short time. Papers are usually delivered early in the morning  so children can easily do this before going to school.

Posted in Financial freedom, Kids

Teaching Financial Literacy in Schools

Posted on by Tim Connolly
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Teaching Financial Literacy in Schools

Financial education for kids simply means the possession of knowledge or skill that allows your children to make informed and effective decisions about their financial resources. Little or no knowledge of basic personal finance and economic issues has left millions of students and adults mired in credit card debt. A major reason for this is the lack of training at an early age and  absence of  financial education in schools which has such a negative impact on sound financial decision making. In today’s world, financial literacy is very important, as being aware of money management, income, saving, and spending can equip our young people with knowledge to take charge of their finances. and fight fraud.

It is imperative that educators in the U.S. begins to equip students with the knowledge and skills to succeed in today’s global economy. In fact, in a recent NEA article, a retired teacher called Allen Cox supported requiring high school students to complete a financial literacy course which included saving, investing, and spending money.

It’s important that these kids learn how to manage risks, save for a rainy day, and avoid taking on unmanageable debts. These days, economic and technological development have brought greater global connectedness and massive changes in communication and financial transactions as well as in social interactions and consumer behavior. With all these in play, poor financial decisions can be more damaging than previously feared.

Statistical facts according to the US Government printing office:

  • 10 to 20 percent of high school seniors nationwide will have had no personal financial training by the time they graduate.
  • 82% of high school seniors failed a 13-question personal financial test examining their knowledge of interest rates, savings, loans, and calculating net worth.
  • 43% of student loan borrowers are not making payments.
  • Only 27% of young adults in the United States know about inflation and risk diversification and can do simple interest calculations.

Ways to integrate financial education in schools

Having shown the importance of financial literacy, we naturally arrive at the question regarding what can be done to improve financial knowledge amongst our kids and which programs can improve saving and wealth accumulation. Here is a list of things that will work.

Increase access to financial education: 

providing students with early access to financial education will help them develop money management skills, acquire more experiences with personal finance and develop effective financial habits.

Require students to complete a personal finance course to graduate from high school: 

exposure to financial education in high school will elevate the rates at which these students save and accumulate wealth but unfortunately only thirteen states in America namely Georgia, Idaho, Louisiana, Missouri, New Jersey, New York, North Carolina, South Dakota, Tennessee, Utah, Virginia, West Virginia and Illinois require students to complete a personal finance course to graduate from high school.

Provision of teacher training and professional development: 

Teachers should be adequately trained, resourced and receive continuous support to teach students about money management. In Pennsylvania, huge steps have already been taken as the governor’s institute on financial education offers training on how to integrate financial education into existing courses.

Support public awareness campaigns that create a demand for financial education: 

Providing resources on talking to young people about financial literacy is another important step. The United States Department of Treasury developed the Financial Literacy and Education Commission, which is a government-sponsored awareness campaign that can be promoted and supported by states.